Diversity, Equity, and Inclusion: How We Got Here and Where We Are Going

Although there is no common definition of workplace diversity, equity, and inclusion (“DEI”), these programs can generally be characterized as falling into two groups—those that are inclusive and those that are exclusive in that they confer benefits on individuals based on their membership in a particular protected category.  Examples of the latter include scholarships, mentorship, and other similar programs that are available only to members of a certain protected class.  

In a profound shift, both types of DEI programs in the United States are being challenged. Employers find themselves at a crossroads: how to continue advancing principles of diversity and inclusion while navigating the heightened legal risk and compliance challenges arising out of this new legal environment.

Legal Standard

Federal employment discrimination law rests on a principle of individual equality. Title VII of the Civil Rights Act of 1964 prohibits employers from making employment decisions “because of” race, sex, or other protected characteristics. Historically, courts have tolerated limited, narrowly tailored voluntary affirmative action measures in specific circumstances, most notably under frameworks developed in cases such as Regents of the University of California v. Bakke, which held that the use of race as a criterion in university admissions decisions was constitutionally permissible but that the use of set-asides was not. That tolerance has narrowed significantly.

Although exclusionary DEI programs have been relatively commonplace in corporate and higher education settings until recently, Title VII has always barred employers from conferring tangible employment benefits—such as compensation, promotions, training opportunities, or preferred assignments—based on protected characteristics.  The statute’s substantive reach has not changed; rather, the procedural and analytical framework governing how such claims are evaluated has changed.

The Supreme Court revisited Bakke in Students for Fair Admissions v. Harvard (2023) and invalidated all race‑conscious university admissions policies, holding that such policies constituted improper intentional discrimination. Although SFFA arose in the educational context under the Equal Protection Clause and Title VI, its reasoning has been cited as relevant context for renewed scrutiny of race‑ and sex‑conscious decision‑making beyond admissions. 

More directly applicable to private employers is the Supreme Court’s unanimous decision in Ames v. Ohio Department of Youth Services (2025). In Ames, a heterosexual woman alleged that she was passed over for promotion in favor of a lesbian woman, demoted, and replaced by a gay man.  The Court held that the standard for analyzing discrimination claims under Title VII “does not vary based on whether or not the plaintiff is a member of a majority group.” Importantly, Ames did not expand Title VII’s substantive prohibitions. Rather, it removed a procedural asymmetry that had often made majority-group claims more difficult to advance than more traditional discrimination claims. 

Taken together, SFFA and Ames reinforce a clear principle: civil‑rights law protects individuals, not groups. Exclusionary DEI programs, and other programs that allocate benefits and opportunities based on protected characteristics, present significant legal risk and are increasingly difficult to defend under current law.

Executive Orders and Federal Government Guidance

The federal government’s stance on DEI shifted sharply with the change in administration in January 2025, as the second Trump administration moved quickly to dismantle or discourage many DEI‑related efforts across the public and private sectors.  By doing so, federal authorities have sought to expand the principles articulated by SFFA, and later Ames, through executive orders and agency guidance. Although these pronouncements do not change substantive civil‑rights law, they signal enforcement priorities that organizations ignore at their peril.  

In 2025, the administration published a series of Executive Orders (EOs) targeting DEI programs in the public and private sectors.  Among other things, these EOs terminate DEI programs in the federal government, repeal prior executive orders designed to promote equal opportunity in the workplace by reducing barriers to employment opportunities, impose certification requirements on federal contractors and grant recipients tied to compliance with federal anti‑discrimination laws and potential liability under the False Claims Act, and direct federal agencies to “combat illegal private‑sector DEI preferences, mandates, policies, programs, and activities.”  

Federal agencies have attempted to implement the EOs through directives and guidance. In March 2025, for example, the Equal Employment Opportunity Commission (EEOC) and the Department of Justice (DOJ) jointly issued technical guidance titled “What To Do If You Experience Discrimination Related to DEI at Work." The EEOC also issued an associated set of FAQs. In July 2025, the DOJ issued a memorandum to federal agencies intended to clarify how federal anti-discrimination laws apply to DEI programs that “may involve discriminatory practices.” According to this memorandum, policies and practices such as exclusionary DEI programs and the use of neutral criteria such as geographical or institutional targeting as proxies for protected characteristics may violate Title VII. 

Perhaps the most visible signal of this administration’s push to eradicate “illegal DEI” has come from its Chair, Andrea Lucas. Since assuming the role in 2025, Chair Lucas has publicly stated that many common DEI programs likely violate anti‑discrimination laws and has pledged aggressive enforcement. In December 2025, Chair Lucas released a public video stating: “Are you a white male who has experienced discrimination at work based on your race or sex? You may have a claim to recover money under federal law.” This direct outreach marked a departure from prior EEOC communications, a practice that has never—at least not in recent memory—encouraged members of a single demographic group to file workplace discrimination claims.

Executive orders and agency guidance do not change the law or create new legal obligations. Practically, however, these pronouncements have significant impact on all employers and recipients of federal funding by shaping enforcement priorities and directing agencies to adopt specific legal interpretations.

Conflicting Laws and Other Issues

Even as employers respond to heightened enforcement and litigation risk, several ongoing issues complicate how DEI programs operate. 

Most notably, multinational organizations face conflicting regulatory requirements, such as those in certain countries that mandate disclosure of workforce demographics and inclusion metrics and gender-diverse board representation.  Similarly, domestic employers must navigate state and local laws that conflict with federal directives. 

Organizations must also navigate stakeholder pushback. Many employees, investors, and business partners view DEI programs as signals of institutional commitment to fairness and inclusion, and abrupt or poorly explained rollbacks can create challenges.  Internally, employees from underrepresented groups may perceive the elimination of mentorship programs, employee resource groups, or diversity initiatives as a withdrawal of support, potentially giving rise to hostile‑environment or discrimination claims. Externally, organizations also confront divided shareholder pressure, with some blocs demanding continued progress on DEI and others urging that it be dismantled. Reflecting this divide, shareholders rejected approximately 98% of anti‑DEI proposals during the 2025 proxy season.

Critically, laws prohibiting discrimination based on protected characteristics have not changed. Employers that scale back or eliminate DEI initiatives must ensure they continue to abide by laws prohibiting discrimination and harassment in all terms and conditions of employment. 

What’s Next? 

Looking ahead to 2026 and beyond, the center of gravity is shifting from policy debates to fact‑intensive scrutiny of how DEI initiatives operate in practice. Several trends are emerging.

Federal Enforcement Efforts that Test Boundaries. Agencies appear poised to move from broad investigations to selective merits cases intended to clarify the line between lawful inclusion efforts and impermissible preferences. High‑visibility matters will likely focus on programs that allocate tangible benefits, such as compensation, access, or opportunities based on protected traits.

State‑Level Polarization. The gulf between conservative-leaning and liberal-leaning states will likely widen. Some states are building legal infrastructures that disfavor any consideration of, or explicit reference to, protected characteristics in employment and contracting, while others are expanding disclosure and pay‑equity obligations. Multi‑state employers should expect the same program to be viewed very differently across jurisdictions.

Certification. Certain recipients of federal funding are now required to certify that they do not engage in DEI that violates federal anti-discrimination laws as a condition of funding.  Failure to abide by the terms of these certifications may expose funding recipients to liability under the False Claims Act, as well as loss of funding.  Although courts have held that this requirement is not facially unconstitutional, it remains to be seen whether it is unconstitutional as applied. In the meantime, given this administration’s position on what constitutes “illegal DEI” and the lack of a commonly accepted definition, funding recipients are being forced to make decisions in a legal vacuum. 

Technology as a Double‑Edged Sword. AI‑enabled tools promise more consistent decision‑making, but scrutiny increasingly focuses on whether these systems embed bias or encode impermissible preferences. As states and localities move to regulate AI‑driven hiring and employment tools, the next phase is less about adoption and more about compliance, so that organizations can demonstrate that system design, validation, and audit trails align with neutral, job‑related criteria.

Compliance Strategies 

As scrutiny intensifies, many organizations are adjusting DEI programs to reduce legal risk while preserving lawful inclusion efforts. Organizations that choose to continue DEI programs should design their programs as a means to inclusion rather than exclusion, and by using clear criteria, neutral mechanisms, and disciplined governance.  

The following compliance strategies reflect clear, practical steps employers are taking in response to heightened enforcement.

1. Redefine “Diversity.”  Many employers are choosing to redefine “diversity” broadly, to encompass diversity of thought, backgrounds, socio-economic status, geography, and the like. Although this action does not eliminate risk, it will withstand scrutiny to a greater degree than using a definition of “diversity” based solely on protected characteristics.
2. Replace Demographic-Driven Criteria with Skills- and Qualifications-Based Assessments.  Discontinue the use of numerical data tied to achievement of diversity outcomes, particularly where linked to board and manager compensation.  Base hiring, promotion, and admissions on specific, individualized, and measurable qualifications related to performance and role requirements.
3. Ensure Inclusive Access to Benefits.  Structure mentorship, leadership pipelines, internships, and ERGs around neutral eligibility criteria (such as role, tenure, or skills), while using outreach to encourage broad participation.
4. Train Managers. Provide manager nondiscrimination training, as well as training focused on consistent application of neutral criteria, performance management, or other practices that could create legal liability.
5. Expand the Pool Through Race‑Neutral Pipeline Programs. Invest in apprenticeships, returnships, skills‑based hiring, and other race‑neutral pathways that broaden candidate pools without regard to protected traits.
6. Localize DEI Governance for Multinational Operations. Adopt region‑specific DEI programs and disclosure controls so that compliance with foreign laws minimizes the risk that foreign compliance is not perceived as unlawful discrimination under U.S. law.

DEI initiatives remain lawful. As always, those organizations that choose to continue, start, or restart diversity programs should take great care to ensure that their programs comply with federal and state anti-discrimination laws.  It is also important to determine whether their programs would withstand scrutiny under this administration’s interpretations of these laws. 

For questions regarding DEI compliance and its implications for your organization, feel free to reach out to your Womble Bond Dickinson attorney, the authors of this Insight, or another member of our Labor and Employment Practice Team. We will continue to monitor employment law developments and provide updates as warranted, so make sure you are signed up for the Womble Bond Dickinson newsletter.